2005 (4) TMI 460 - AT - Central Excise

Summary

Issues: Imposition of penalty for depositing cheques with Chief Accounts Officer and taking immediate credit in PLA before clearance of goods.

The appellant filed an appeal against the imposition of a penalty of Rs. 2 lakhs for depositing cheques with the Chief Accounts Officer and immediately taking credit in their PLA before clearing the goods. The appellant argued that the duty was paid even before the show cause notice was issued. They also claimed that the Chief Accounts Officer accepted the cheques in March, which were subsequently presented to the bank and duly encashed. The appellant cited a previous Tribunal decision in their favor. The Revenue contended that the Chief Accounts Officer had no authority to collect the cheques, but failed to provide evidence of any administrative action against the officer. The Revenue confirmed that the cheques were honored by the bank and not returned due to insufficient funds. Consequently, the Tribunal found no grounds for imposing a penalty and set aside the impugned order, allowing the appeal.

The key issue in this case was the imposition of a penalty on the appellant for depositing cheques with the Chief Accounts Officer and immediately taking credit in their PLA before clearing the goods. The appellant argued that the duty had been paid prior to the issuance of the show cause notice. They also highlighted that the Chief Accounts Officer had accepted the cheques, which were subsequently presented to the bank and encashed. The appellant relied on a previous Tribunal decision that favored them. On the other hand, the Revenue contended that the Chief Accounts Officer lacked the authority to collect the cheques. However, the Revenue failed to provide any evidence of taking administrative action against the officer. It was confirmed that the bank honored the cheques without any issues of insufficient funds. Consequently, the Tribunal found no basis for imposing the penalty and ruled in favor of the appellant, setting aside the impugned order.

In this case, the appellant appealed against a penalty imposed for depositing cheques with the Chief Accounts Officer and immediately taking credit in their PLA before clearing the goods. The appellant maintained that the duty had been paid even before the show cause notice was issued. They also pointed out that the Chief Accounts Officer had accepted the cheques, which were then presented to the bank and duly encashed. Furthermore, the appellant referenced a previous Tribunal decision that supported their position. On the contrary, the Revenue argued that the Chief Accounts Officer did not have the authority to collect the cheques. However, the Revenue could not provide any evidence of taking administrative action against the officer. It was established that the bank honored the cheques, indicating no insufficiency of funds. Consequently, the Tribunal concluded that there were no grounds for imposing the penalty and consequently allowed the appeal by setting aside the impugned order.